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Terrain Minerals closes toll treatment deal with Gold Fields

Last updated: 07:21 22 Oct 2010 AEDT, First published: 06:21 22 Oct 2010 AEDT

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Terrain Minerals (ASX: TMX) has signed an agreement with Gold Fields’ (NYSE: GFI) Agnew Gold Mine to toll treat gold ore from the Celtic Pit, in the Bundarra Project, north of Leonora in Western Australia.

The finalisation of this toll treatment agreement is another significant step for TMX as it progresses from explorer to producer status.

Ore from the Celtic Pit mining inventory amounting to approximately 60,000t @ 3.5g/t gold (undiluted, at a 1.0g/t gold lower cut-off grade) will be trucked 90km to Agnew for processing.

Terrain has forecast 6,000 ounces of gold will be recovered from toll treatment of the ore, which the company said should yield a cash surplus of between $2 and $3 million over a mining period of three months or less.

Gold Fields is one of the world's largest unhedged producers of gold with attributable production of 3,64 million oz per annum from eight operating mines in South Africa, Ghana and Australia.

Gold Fields will be paid for these services through a share of the gold recovered. With no cash outlay this greatly assists TMX with its cash flow.

Mining preparation activities are already underway, ahead of scheduled mining in November and December 2010.

With a net A$1.2 million available from a convertible note facility announced yesterday, Terrain now has the funding to mine gold at Celtic Pit.

TMX has a market cap of A$5.32M million and had $A1.07 million cash at the end of the June quarter.







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